Global stocks are near a record high
MSCI Asia Pacific Index set for fourth straight monthly gain
Investors assess global earnings before U.S. GDP report
Asian equities retreated, trimming a fourth straight monthly gain for the regional benchmark index, as geopolitical concerns intensified and investors assessed corporate earnings before a report on growth in the world’s largest economy.
The MSCI Asia Pacific Index dropped after climbing for six straight sessions. Results at Amazon.com Inc. and Alphabet Inc. buoyed Nasdaq futures. Crude climbed back above $49 a barrel after tumbling on concern over a supply glut. The yen strengthened, weighing on Tokyo shares. The euro held losses after the European Central Bank signaled its commitment to stimulus even as the region’s economy firms.
Geopolitical concerns continued to loom over the markets. Donald Trump said he sees the chance of a “major, major conflict” with North Korea over its nuclear program, though he prefers a diplomatic solution, according to an interview with Reuters. The Trump administration has stirred markets this week as it unveiled a plan to cut taxes and gave mixed signals on its intentions for the North American trade agreement.
Global stocks are near a record high as investors bet on improving global economic growth and stronger earnings from some of the world’s largest firms lift sentiment. Profit rose at China Construction Bank Corp. in the first quarter, with Industrial & Commercial Bank of China Ltd., the nation’s largest, Agricultural Bank of China Ltd., and Bank of China Ltd. all scheduled to report results on Friday.
In Europe, ECB President Mario Draghi showed growing enthusiasm about the state of the euro-area economy, while cautioning that inflation pressures remain too weak to contemplate paring stimulus. The Bank of Japan kept its policies unchanged while lowering its inflation forecast, underscoring that any exit from its monetary easing remains far away.
Japanese data on Friday indicated that a modest recovery is continuing, yet inflation largely refuses to budge.
Events that will catch investors’ eye as the week wraps up:
- The U.S. Congress is considering a continuing resolution to avoid a government shutdown.
- U.S. GDP is due. It’s projected to show the economy expanded at a 1 percent annualized rate in the first quarter, the weakest pace in a year.
- Russia is expected to announce a decision on monetary policy.
Here are the main moves in markets:
- The MSCI Asia Pacific Index fell 0.2 percent as of 1:12 p.m. in Tokyo. The measure is up 1.4 percent for the week, and is poised for a fourth monthly gain, the longest winning streak since April 2015.
- Japan’s Topix fell 0.3 percent. The gauge is up 2.9 percent for the week, the best performance this year. South Korea’s Kospi slipped 0.1 percent from the highest level since 2011. Australia’s S&P/ASX 200 Index lost 0.1 percent.
- The Hang Seng Index in Hong Kong dropped 0.5 percent, and the Shanghai Composite Index lost 0.3 percent. The latter gauge is down 2.4 percent in April.
- Futures on the Nasdaq climbed after the cash equity market shut Thursday, driven higher by tech earnings.
- Contracts on the S&P 500 were little changed. The underlying gauge rose 0.1 percent on Thursday and the Nasdaq 100 Index jumped 0.5 percent to a record. The Stoxx Europe 600 Index slipped 0.2 percent after climbing for six straight sessions to the highest level since August 2015.
- The Bloomberg Dollar Spot Index rose less than 0.1 percent.
- The yen added 0.1 percent to 111.16 per dollar. The currency is down 1.8 percent since April 21. The euro was at $1.0866, down less than 0.1 percent and heading for a third weekly gain.
- Oil rose 0.9 percent to $49.42 a barrel, after tumbling 1.3 percent on Thursday.
- Gold climbed 0.1 percent to $1,265.40.
- The yield on 10-year Treasuries fell less than one basis point to 2.29 percent, retreating for a third straight day.
- Australian benchmark yields lost three basis points to 2.58 percent.